BoG to tighten banks’ credit risk controls as private-sector lending surges 35.5%
The Bank of Ghana (BoG)is set to introduce a new Credit Risk Management Directive as private-sector credit growth accelerates sharply, raising the need for stronger safeguards against a deterioration in banks’ loan portfolios. Governor Dr Johnson Asiama said the directive will strengthen banks’ credit risk frameworks amid a significant rebound in lending to the private […]
The Bank of Ghana (BoG) plans to implement a new Credit Risk Management Directive as private-sector lending has surged by 35.5% in August 2026, up from 13.3% a year prior. Governor Dr. Johnson Asiama announced the directive at a meeting with bank executives, emphasizing the need for stronger safeguards to protect banks' loan portfolios from potential deterioration.
The rapid growth in private-sector credit, reaching 29% in real terms, was driven by lower lending rates, a more relaxed credit stance among banks, and a recovery in credit demand. While the average lending rate dropped to 15.9% from 24.2% a year earlier, Asiama cautioned against compromising credit standards amid the rapid lending expansion.
He stressed that the surge in private-sector credit should be supported by robust underwriting standards and effective risk-management frameworks. The new directive will encompass credit origination, administration, monitoring, measurement, and recovery processes. Asiama also noted that while the banking sector's non-performing loans (NPL) ratio has significantly decreased, it remains high compared to regulatory benchmarks.
Consequently, the BoG anticipates banks to maintain rigorous credit risk management practices and adhere strictly to existing NPL guidelines.
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